Arete Financial Freedom, and others named, were sued by the Federal Trade Commission (FTC) over alleged student loan assistance service issues. The raid and court-ordered takeover of the businesses run by the parties halted their settlement business. Arete Financial Freedom objected to the loss of their settlement business which they claimed was being run better than their student loan assistance operation.
The FTC, Receiver, and Arete Financial Freedom have met and are attempting to work out a resolution to allow the settlement business to restart.
This appears to have two various flavors. The first is allowing Arete to go back and start servicing their already enrolled clients. The second would add the ability to start selling settlement services again. And while I constantly complain about the lack of consumer sophistication when it comes to purchasing debt relief services, launching the Arete name again in active sales seems like an odd move.
The parties could not come to an agreement so the relaunch of Arete settlement services is on hold until either the parties can agree or the court rules.
The FTC says they will let Arete put their website back in action.
Do You Have a Question You'd Like Steve to Answer? Click Here.
“Within three (3) days after entry of this Order, the Receiver shall remove the currently placed notice on the www.aretefinancial.org site.”
A sticking point is the FTC position on notification of consumers. “Within three (3) days after entry of the Order, Arete shall submit to the FTC, for its approval as to content and form, a written notification to consumers with Debt Settlement Accounts that Arete is resuming servicing of those accounts pending a final adjudication in this matter, and include a copy of the Order with the notification. Such notification must also clearly and conspicuously inform consumers that they may, without penalty, cancel any agreement they have with Arete and withdraw any funds in their custodial debt settlement accounts. Upon receiving the FTC’s approval, Arete shall send such notification to consumers with Debt Settlement Accounts within one (1) day.”
Arete says they don’t like this request. “The Arete Individuals do not agree with the onerous notice requirements the FTC seeks to impose upon them in giving notice to consumers. As previously briefed, the Complaint is bereft of any allegations concerning the operations of Arete’s debt settlement business. See, e.g., Dkt. 96. Instead, the Complaint is focused on student loan consulting practices. The FTC’s notice provisions not only constitute an undue burden but will cause consumer confusion and have the tendency to lead to an unnecessary and unwarranted loss of current customers, thus resulting in decline of gross revenues.”
At issue is also the release of frozen funds to provide back pay for Arete employees which also probably include some of the named parties in the case.
Here is the bottom line. Until this gets resolved, even though they are closer towards a resolution, Arete consumers with settlement accounts will be stuck in limbo.
It now appears either the parties will need to magically have a meeting of the minds or we will just have to sit and wait for a court ruling.